The “China Model”
Many media pundits and assorted luminaries have complained about a “China model,” wherein the economy is capitalist but the government is “Communist.” Ignoring the seemingly obvious contradiction there and assuming they mean that China appears to be a capitalist-authoritarian blend, Dr Thomas Barnett allays those fears in his recent column. First, he breaks down various manifestations of capitalism. They are:
- State-directed
- Large-cap dominated
- Oligarchical
- Entrepreneurial
The US economy is a mix of 2 and 4 (a smart and sustainable blend, per Barnett). China’s economy is much more #1, with 4 at the fringes. For comparison, Russia’s economy is very much 3 with quite a bit of 1.
With that out of the way, what about the pundits? Are they right to be worried that China has found a way to foster capitalism and yet keep their authoritarianism? (Indeed, is their capitalism just a way of doing economically what some countries have tried to do via direct combat? I.e., are they “taking over” with their affordable products and vast exports?)
Barnett assures us (and I agree w/ him) that this is not the case:
Point being, China’s model of development constitutes more of an endorsement of American-style capitalism than an improvement –much less rejection. This strategy of “incremental change, or entrepreneurial capitalism at the margin,” allows China to gradually shift its economy toward the U.S. blend of big firms surrounded by entrepreneurial small firms.
What comes next? More and more freedom if China hopes to hold onto those entrepreneurs.
Implied in that last sentence is the strong likelihood of democracy (not necessarily by name, but in practice) of sorts. Not all “democracies” are actually very democratic by our standards; not all “Communist” countries are Communist, with China being an example of this.
Now that the Sino Bogeyman is in fact on the road to US-style capitalism and freedom/democracy, maybe the next prez will be open to true partnership with this huge potential ally.